Tax Holiday Ends, Consumers Scrimp

Higher Payroll Taxes Are Putting a Chill on Spending, According to Some Businesses, Though Retail Sales Are Mixed

By

Neil Shah

Updated Feb. 7, 2013 8:43 p.m. ET

Most Americans who draw a paycheck saw their tax bill go up last month when a payroll-tax holiday expired. The question is whether that is prompting consumers to curb spending, just as the economy is struggling to gain traction.

Some early signs suggest they are tapping the brakes. Surveys show the majority of Americans who are aware of the tax increase say they plan to cut spending, and consumer confidence has wavered. Companies like...